Direct Consignment Rule

The direct consignment rule is an important institution within rules of origin, meaning that originating goods of a beneficiary country must be transported directly from the beneficiary country to the granting country in order to enjoy preferential tariff treatment. Its core purpose is to prevent goods from undergoing substantial processing or repackaging in a third country to circumvent rules of origin. Its application scenarios mainly include origin determination under the Generalized System of Preferences (GSP), Free Trade Agreements (FTAs), and various preferential trade arrangements. Points to note: if goods are transshipped through a third country, they must satisfy conditions such as 'not entering trade or consumption in the third country,' 'undergoing only necessary operations such as loading, unloading, and repacking,' and 'remaining under customs supervision'; otherwise, preferential eligibility may be revoked. Unlike the 'substantial transformation' rule, the direct consignment rule focuses on the logistics route rather than the processing process; unlike the 'origin cumulation' rule, the latter allows the use of originating materials from other member countries, while the former emphasizes the directness of transportation. Foreign trade practitioners need to retain customs certificates from the transit place and the full set of bills of lading to prove compliance with the direct consignment requirement.